Price Oracle

Hummus Exchange pool design for stablecoins assumes the peg is maintained, however, it is possible that one of them becomes unpegged due to unforeseen reasons. Hence, Hummus Exchange tracks each token’s exchange rate via DIA, helping protect liquidity providers deposits in case of an unpeg of more of 2% (max price deviation).

The use of an oracle is then seen as an additional layer of security for LP. In case there is significant price deviation detected by oracle, this will stop all trades to and from that asset, and also disable withdrawInOtherAsset for that asset.

Please note also that in the case of a bank run (which does not imply unpeg), LP providers may be obliged to withdraw in the most covered asset in the pool.